European Carmakers Cut Output

French and German car manufacturers have closed their factories temporarily as the demand falls because of the financial slowdown. Additional German banks are seeking state aid while Eastern European economies have been badly hit with the International Monetary Fund helping out Ukraine and Hungary.

BMW, Germany's car giant stopped its production in Leipzig for four days. Mercedes-producer Daimler reported a closure of five weeks in December.

Renault, a French car company also temporarily shut down all its local factories and of its foreign plants like Dacia Mioveni in Romania while Peugeot-Citroen announced it will cut production by thirty percent.

Chief executive of Peugeot-Citroen, Christian Streiff told the Financial Times that he didnt rule out closing some factories including in France, where Peugeot operates around six factories. The French car maker expects demand for cars in Western Europe to plunged 17 percent at the end of the year.

The slowdown in European car production is similar with the problems facing in the US, where the three car giants, Chrysler, General Motors and Ford are seeking federal aid as they might face bankruptcy within a year, according to the Wall Street journal.

Elsewhere, German banking sector is continuing to swing with two more banks seeking state aid due to the crisis, West LB and HSN Nordbank.

Recession all through the Euro zone has been signaled by the purchasing manager's index, compiled by data and research group Markit, which decreased to 44.6 in October from 46.9 in September. The index's fall for five consecutive month of contraction.

Providing loans for Hungary, Ukraine

The outlook is not good for Eastern European countries as Germany's growth is falling and Ireland is into recession, predicted two years ago.  

The IMF announced two new members of a growing band of countries set to receive its help in the financial crisis, announcing a $16.5 billion loan for Ukraine and a "substantial" package for Hungary, AFP reports.